The Organisation of Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, have agreed to raise global oil output, pushing Brent crude above $100 a barrel.
The group disclosed this at the end of the 31st OPEC and non-OPEC ministerial meeting held on Wednesday.
The oil cartel added a minuscule 100,000 bpd to the market in September, citing low investment in the global oil sector, and unavailability of excess capacity, among others.
The decision is coming despite President Joe Biden’s trip to Saudi Arabia last month to persuade OPEC’s leader to pump more to help rein in prices boosted by rebounding demand and Moscow’s invasion of Ukraine.
OPEC+ said it considered the dynamic and rapidly evolving oil market fundamentals, necessitating continuous assessment of market conditions.
It noted that the “severely limited availability of excess capacity necessitates utilising it with great caution in response to severe supply disruptions”.
OPEC+ Raises September Output Target By 100,000 bpd
It also said “chronic underinvestment in the oil sector has reduced excess capacities along the value chain (upstream/midstream/downstream)”.
“The Meeting highlighted with particular concern that insufficient investment into the upstream sector will impact the availability of adequate supply in a timely manner to meet growing demand beyond 2023 from non-participating non-OPEC oil-producing countries, some OPEC Member Countries and participating non-OPEC oil-producing countries,” it said.
The oil cartel said preliminary data for “OECD commercial oil stocks level stand at 2,712 mb in June 2022, which was 163 mb lower than the same time last year, and 236 mb below the 2015-2019 average, and that emergency oil stocks have reached their lowest levels in more than 30 years”.
The meeting also noted that “Declaration of Cooperation conformity averaged 130% since May 2020, supported by voluntary contributions of some participating countries”.
It decided to “reaffirm the decision of the 10th OPEC and non-OPEC ministerial meeting on April 12th, 2020, and further endorsed in subsequent meetings, including the 19th OPEC and non-OPEC ministerial meeting on the 18 July 2021”.
“Adjust upward the production level for OPEC and non-OPEC Participating Countries by 0.1 mb/d for September 2022 as per the attached table. This adjustment does not affect the baselines decided on the above-mentioned meeting on July 18, 2021,” the group said.
The oil cartel scheduled its next meeting for September 5.